The system for housing asylum seekers around Yorkshire is “teetering on the edge” and needs more involvement from local communities, according to one of the region’s council leaders.

Barnsley council’s Sir Steve Houghton issued the warning after he and 13 other local authority bosses wrote to Home Secretary Sajid Javid to say there is a risk of “catastrophic failure” for the system which provides accommodation for those seeking refugee status.

As revealed in The Yorkshire Post, they warned that some local authorities are considering pulling out of the scheme that houses more than 5,000 asylum seekers around the region after criticising the “mounting chaos” surrounding the project.

Local councils say they are being increasingly sidelined and that many towns and cities across the North each have more asylum seekers “clustered in a handful of wards than entire regions in the South and East of the country”.

The future of the £600m contract to provide asylum housing in Yorkshire between 2019 and 2029 was thrown into doubt this summer after it emerged that there were no successful bids to run it when it comes up for renewal next September.

It is understood that a bid by outsourcing giant G4S, which has been suffering financial losses while running the service since 2012 due to having to deal with more asylum seekers than expected, was not accepted by the Home Office.

New bidders are now being sought for the 10-year contract, leading to fears that local authorities may have to accept higher numbers of asylum seekers and poorer quality accommodation so the Government can persuade a company to run the scheme.

North Yorkshire council leaders, who had been in the process of agreeing to accept asylum seekers for the first time, have now halted negotiations until they get assurances from the Government.

Sir Steve said: “We believe in doing our bit to look after those with humanitarian needs, but the system is teetering on the edge. Cheap housing in the North decided by the Home Office and G4S can’t be the only option.

“Councils and local communities now unequivocally need to be fully involved to make this system fair and to work for everyone.”

According to the leaders, which represent Labour and Tory-run administrations, the “mounting chaos” now surrounding the system is leading to a significant risk of a housing crisis for asylum seekers in Yorkshire from next year. They fear a repeat of 2012, when G4S were unable to find enough homes in Yorkshire and councils were forced to step in to avoid possible “mass sudden homelessness of hundreds of asylum seekers”.

A Home Office spokeswoman said: “There is an ongoing procurement process for the asylum accommodation and support contract for the North-East, Yorkshire and Humber region.

“We are confident of having a fully operational contract before the expiry of the current contract, with sufficient time to properly transition the services.”

G4S declined to comment.

Of the 5,054 asylum seekers homed in Yorkshire and the Humber between January and March, the latest period for which data is available, the majority were in the region’s biggest cities. The total number of asylum seekers in Yorkshire and the Humber has been rising since around 2011, but lower than the levels seen in 2004.

In the letter to Sajid Javid sent earlier this month, the 14 Yorkshire leaders call on him to “personally intervene to enable the Home Office to get a grip on the asylum system and enable them to work in partnership with, rather than exclude, local authorities”.

Dave Brown, head of local-authority led partnership Migration Yorkshire, said: “This letter is unprecedented and the potential impact on how Yorkshire is able to support those people fleeing persecution is almost unthinkable.

“I urge everyone to get round the table and agree a system that works for government, councils and communities in Yorkshire.”

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